Astro Teller, the “Captain of Moonshots” at Alphabet’s X idea factory, shows off two of X’s innovations: Google’s self-driving car, a venture that was spun off as Waymo; and the communications platform at far left that’s used on Project Loon’s balloons. (GeekWire Photo / Alan Boyle)

But today’s rapid pace of innovation and competition is increasing the pressure to turn blue-sky ideas into marketable products and services. No company, not even Alphabet, can afford to bet on every hunch. So X’s aim is to systematize the process of picking winning technologies.

“We are trying to be the card counters of innovation, not the gamblers of innovation,” Teller said.

From the outside, X’s spot looks more like your typical suburban corporate campus than a factory in the 20th-century sense of the word. The facility started out in the 1960s as Mountain View’s Mayfield Mall, the first air-conditioned, enclosed shopping center in Northern California. After the mall closed down in the 1980s, the space went through a couple of incarnations as an office complex.

When X took over the property in 2015, it gave the facility an open-girder, high-tech industrial look, including bare concrete floors that are easy for bicycles, scooters and Teller’s rollerblades to navigate. Offices, hardware labs and meeting rooms are interspersed with lounge areas, micro-kitchens and a spacious central atrium.

A rooftop that was once a parking lot for shoppers now serves as a drone testing ground. During our visit in late October, you could hear the buzz of Project Wing’s aerial vehicles up above. A ground-level greensward is surrounded with netting that can be drawn around to provide another secure area for testing drones. And you can occasionally see a Waymo self-driving vehicle with a human behind the wheel, making its rounds through the parking lot.

X sets a high bar for the projects that get a green light: They have to address a huge problem that affects millions or even billions of people. The project has to propose a radical solution to that problem. And there has to be a breakthrough technology to bring about that solution.

“The requirement that all three of these things be true is enough to cause us to throw out more than 99 percent of our ideas,” Teller said.

Then there are the moonshot stars. In addition to Waymo, X’s graduates include Google Watch, a geothermal energy venture called Dandelion, and a healthcare venture called Verily.

X’s latest star hasn’t even graduated yet. It’s Project Loon, a balloon-based wireless communications platform that’s been under X’s wing since 2011. Loon took the spotlight in the wake of Hurricane Maria, which knocked out power and communications for nearly all of Puerto Rico’s 3.4 million residents.

Before the storm, Project Loon’s team had been working on an AI-based navigation system that can keep high-altitude balloons over a given area for weeks or months at a time to provide aerial internet connections. Peru was the primary testing ground, and Puerto Rico was one of the launch sites. After the hurricane hit, the focus shifted to filling the gap in Puerto Rico. The team quickly worked out arrangements with Puerto Rico’s government and federal authorities as well as AT&T and T-Mobile to boost connectivity.

“The Puerto Rico thing hasn’t been easy, because we didn’t expect for Loon to work that way,” Project Loon engineer Sal Candido said. “We weren’t working on navigation for Puerto Rico, we weren’t working with any of the partners, we didn’t expect to bring up service that fast. But that’s the way this project works, and the way X works. We thought we’d give it a try. Hopefully, we’ve been able to help some people.”

X says Project Loon is currently providing basic internet connectivity for more than 100,000 people in Puerto Rico.

“We’re very bullish about Loon, and they have significant work still to do — call it two or three minor miracles that they still need in order to be a thriving business,” Teller said. “But unlike some projects, they have about 10 different levers that they can pull, so they can spread that need for two or three small miracles across a lot of different things. … We have great confidence that they’re going to do it.”

Teller voiced great confidence in X’s future as well. More than a year ago, there were rumblings that the moonshot factory was getting bogged down in organizational inertia, but the emergence of Waymo and other graduates seems to have turned the tide.

Idea factories are turning into a growth industry — thanks in part to new entrants in the Seattle area such as BlueDot, Intellectual Ventures’ ISF Incubator and the Allen Institute for Artificial Intelligence’s startup incubator. The way Teller sees it, all that interest validates the approach that he’s been pioneering for years.

“I feel like we’re in competition with the problems, not in competition with other people trying to solve problems,” he told GeekWire. “I’m so happy to see other groups trying to solve some of humanity’s problems.”

So does that mean Teller’s satisfied with X’s formula? No way.

“We’re never happy with the model that we have. We’re constantly trying to learn and improve it,” he said. “We have a joke internally: ‘We’re the worst moonshot factory in the world … except for all the other ones.’ ”

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